UAE mobile phone company i-mate has gone out of business, according to market sources.

The company, which mainly sold branded smartphones, has closed its office in Dubai Internet City and founder and CEO Jim Morrison is believed to have left the country.

Staff were told to take compulsory two-month unpaid leave in an e-mail last Wednesday, according to employees, but the next day received information that the operation was closing and found the office locked.

Calls from ITP to i-mate's DIC office and to Morrison have gone unanswered, and the office is shut.

Retail partners of the company have also been told unofficially that it is no longer in business.

i-mate de-listed from the UK AIM stock market in November of last year, after its share price dropped to 0.12 UK pence.

At the time, Morrison told arabianbusiness.com that the company was speaking to two new investors, to finance new products and that the company was also seeking to buy its own manufacturing facilities in China and buy into software development. The company would also seek a new listing, this time on the Dubai stock market.

Morrison blamed the company's drop in share price on short-selling, although increased competition in the smartphone market, especially from the Far Eastern original equipment manufacturers (OEMs) that provided i-mate's hardware, and problems with suppliers were believed to have caused problems.

In February, the company launched a new rugged smartphone, the i-mate 810F, to target more niche market segments, although it was the last handset release to date.

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Earlier this summer i-mate is understood to have shifted to a new channel model, based on engaging in direct relationships with retailers, rather than going through distribution.

One Middle East retailer which had signed a direct agreement with i-mate said it had not received delivery of a new device that was due to ship and was today told by a purchasing contact from within the company that it had "shut down".

"The inventories for the new model have been sitting with i-mate and we placed a purchase order last month and were waiting for deliveries, but they never came through," said the retailer. "Our buyers have been trying to call them for the last three days, but they kept answering the phone and promising to call back without saying anything. One of my buyers has just asked them if they have shut down and they said yes."

The retailer added: "A new line-up was supposed to be being released in the summer, around August, but it never came out. They were also another two or three really good models that were due to be coming out around December or January onwards, such as a rugged smart phone. They were basically going with niche products in the smart phone segments and trying to expand out to the typical business user and pick up a new audience, which seemed like the right strategy at that stage for them as well."

Another market source said i-mate had been quiet in the market over recent months, raising questions over the future direction of the company.

"We have not heard of them releasing many products in the market so either they have been working on releasing the products or working on exiting the device business. A couple of months back they stopped doing distribution and started taking shelf space directly with many retailers, but all of a sudden it seems to have stopped."

i-mate was formed in 2001 in Glasgow, and became a high profile addition to Dubai Internet City in 2003. It listed on the UK AIM market in September 2005, posting profits of $22.5 million in its first year.

The company came to prominence as one of the first vendors of Windows Mobile smartphones, with product distribution throughout the Middle East, US, Asia Pacific and Europe, and offices in the UAE, Australia, Italy, UK, Singapore and the USA.

The company's hardware, which included pocket PCs and smart picture frames was all sourced from Far Eastern equipment manufacturers, initially HTC, although this deal ended and the company then worked with a number of different OEMs to source hardware, releasing some 25 Windows Mobile devices in total.